A Given Project Requires a $30,000 Investment and Is Expected

question 50

Multiple Choice

A given project requires a $30,000 investment and is expected to generate end-of-period annual cash inflows as follows:
$$\begin{array} { c c c c } \text { Year 1 } & \text { Year 2 } & \text { Year 3 } & \text { Total } \\\hline \$ 12,000 & \$ 8,000 & \$ 10,000 & \$ 30,000\end{array}$$
Assuming a discount rate of 10%, what is the net present value of this investment? Selected present value factors for a single sum are shown in the table below.
$$\begin{array} { c c c } \begin{array} { c } \mathrm { i } = 10 \% \\\mathrm { n } = 1\end{array} & \begin{array} { c } \mathrm { i } = 10 \% \\\mathrm { n } = 2\end{array} & \begin{array} { c } \mathrm { i } = 10 \% \\\mathrm { n } = 3\end{array} \\\hline .9091 & .8264 & .7513\end{array}$$

• A) $0.00
• B) $21,000.00
• C) ($7,461.00)
• D) $25,033.32
• E) ($4,966.68)

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